In this edition of Politics On Point, Abbey Marshall discusses the basics of taxes, focusing on three main categories: sales tax, property tax, and income tax.
Taxes are the primary way the U.S. government funds public services like roads, schools, and safety services.
Everyone, including individuals and companies, pays taxes in various forms.
Taxes are essential for maintaining the country's infrastructure and services.
READ THE SCRIPT:
[ABBEY MARSHALL / IDEASTREAM]: IT’S TAX SEASON AGAIN! MOST OF YOU DON’T HAVE TO PAY TAXES YET. RIGHT?
TAXES CAN BE PRETTY CONFUSING, EVEN FOR SOMEONE LIKE ME WHO HAS BEEN PAYING TAXES FOR YEARS. SO LET’S TRY TO FIGURE IT OUT TOGETHER.
FIRST, WHAT ARE TAXES? TAXES ARE HOW THE U-S GOVERNMENT GETS THEIR FUNDING. THEY USE TAXES TO PAY FOR PUBLIC SERVICES LIKE ROADS, SCHOOLS, WELFARE, AND SAFETY SERVICES LIKE THE POLICE AND MILITARY.
WHO PAYS TAXES? THE SHORT ANSWER IS… EVERYONE. EVERYONE WHO WORKS PAYS TAXES, EVERYONE WHO OWNS A HOUSE OR A CAR.
EVEN YOU HAVE PAID TAXES IF YOU’VE EVER BOUGHT ANYTHING AT A STORE.
AND COMPANIES HAVE TO PAY TAXES TOO. WHEN THEY HIRE SOMEONE, WHEN THEY SELL GOODS, WHEN THEY BUY MATERIALS.
BUT BEFORE WE MAKE THIS MORE COMPLICATED THAN IT HAS TO BE. TODAY, LET’S ONLY FOCUS ON THE TAXES AN INDIVIDUAL HAS TO PAY.
LET’S FIRST SEPARATE THEM INTO 3 CATEGORIES DEPENDING ON WHEN WE PAY THEM.
TAXES THAT ARE PAID WHEN WE BUY SOMETHING ARE SALES TAXES. TAXES THAT ARE PAID WHEN WE ALREADY OWN SOMETHING ARE CALLED PROPERTY TAXES. AND TAXES THAT ARE PAID WHEN YOU GET MONEY ARE INCOME TAXES.
WHEN YOU BUY SOMETHING AT A STORE OR PAY FOR A SERVICE, YOU ALWAYS HAVE TO KEEP IN MIND THAT YOU ALSO HAVE TO PAY FOR THE SALES TAX.
THE SALES TAX IS USUALLY NOT ATTACHED TO THE PRICE TAG BECAUSE IT’S ACTUALLY DIFFERENT IN EVERY STATE. 45 STATES AND THE DISTRICT OF COLUMBIA COLLECT SALES TAX. THE 5 STATES THAT DO NOT HAVE A SALES TAX ARE: ALASKA, DELAWARE, MONTANA, NEW HAMPSHIRE, AND OREGON.
OUT OF THOSE 45 STATES THAT DO COLLECT SALES TAX, THE ONE WITH THE HIGHEST TAX RATE IS TENNESSEE, AND THE ONE WITH THE LOWEST TAX RATE IS HAWAII.
IN OHIO WE PAY 5.75 PERCENT IN SALES TAX. SO IF NEWSHOUND (POPS-UP) GOES TO THE STORE AND BUYS HIMSELF A BAG OF TREATS FOR 5 DOLLARS, AT THE CHECKOUT LANE HE’LL HAVE TO PAY … 5 DOLLARS AND 28 CENTS AFTER TAX.
PROPERTY TAX IS COLLECTED FROM EVERYONE WHO OWNS A HOUSE OR LAND, AND EVERYONE WHO OWNS A CAR.
THINK OF IT AS A PERMISSION TO KEEP USING THE LAND A HOUSE IS ON AND THE ROADS A CAR DRIVES ON.
SO IT MAKES SENSE THAT THE MAJORITY OF A STATE’S FUNDS COMES FROM PROPERTY TAXES.
THE PROPERTY TAX RATE VARIES BETWEEN STATES AND CITIES. SOMEONE WHO LIVES IN THE CITY OF CLEVELAND PAYS A DIFFERENT RATE THAN SOMEONE WHO LIVES IN CLEVELAND HEIGHTS - EVEN IF THE HOUSES ARE ON THE SAME STREET!
OUR FINAL CATEGORY IS INCOME TAXES. THESE TAXES COME FROM EVERY PERSON WHO HAS A JOB – EVERYONE WITH AN INCOME.
EVERY TIME AN EMPLOYEE GETS PAID, THEIR EMPLOYER KEEPS A PERCENTAGE OF HOW MUCH THEY MAKE TO GIVE TO THE GOVERNMENT.
BUT HOW MUCH DO WE PAY FROM OUR PAYCHECKS? WELL IT DEPENDS ON WHERE YOU LIVE, WHERE YOU WORK, AND HOW MUCH YOU MAKE.
FOR FEDERAL TAXES, IT COULD BE BETWEEN 10 PERCENT TO 37 PERCENT. FOR STATE TAX IN OHIO, IT COULD BE BETWEEN 2.8 PERCENT TO 4 PERCENT. AND IF YOU LIVE IN THE CITY OF CLEVELAND, YOU PAY 2.5 PERCENT.
OK, LET’S TRY IT OURSELVES WITH ANOTHER EXAMPLE. LET’S SAY NEWSCAT (MEOW) LIVES AND WORKS IN CLEVELAND AT OUR LOCAL PUBLIC MEDIA STATION, AND SHE GETS PAID A THOUSAND DOLLARS A YEAR.
SHE WOULD PAY 10% OF HER INCOME TO THE FEDERAL GOVERNMENT. … 2.8% TO OHIO … AND 2.5% TO CLEVELAND.
SO AT THE END NEWSCAT BRINGS HOME ... 852 DOLLARS & 93 CENTS.
OK, SO THAT WASN’T AS COMPLICATED AS I THOUGHT IT WOULD BE!
WE ALL PAY OUR SHARE OF TAXES TO MAKE SURE THAT THE COUNTRY WE LIVE IN IS BEING TAKEN CARE OF.